01—Abstract
Summary
Summary of the 10-Q filed September 6, 2019. Cited figures are marked; the original filing is the authoritative source.
CrowdStrike Holdings, Inc. reported strong revenue growth for the period ending July 30, 2019, with total revenue increasing by 94% year-over-year to $108.1 milliona.
This growth was primarily driven by a 98% increase in subscription revenue, indicating strong customer adoption and expansion of their platform usage. The company's customer base more than doubled, growing by 111% to 3,789 subscription customers. Despite this significant revenue growth and improved gross margins (71% overall, with subscription gross margin at 74%), the company continues to operate at a loss, with a net loss of $51.9 millionb for the quarter.
This loss is largely attributed to substantial investments in sales and marketing (60% of revenue) and research and development (29% of revenue), as well as a significant increase in general and administrative expenses (28% of revenue), partly due to increased stock-based compensation following their recent IPO. The company ended the period with a strong cash position of $732.8 millionc, bolstered by the IPO proceeds.
02—Key points
Key Highlights
- Total revenue surged by 94% year-over-year to $108.1 million.
- Subscription revenue demonstrated robust growth, increasing by 98% year-over-year to $97.6 million.
- The customer base expanded significantly, growing 111% to 3,789 subscription customers.
- Overall gross margin improved to 71%, with subscription gross margin reaching 74%.
- The company raised substantial capital through its Initial Public Offering (IPO) in June 2019, resulting in $732.8 million in cash and cash equivalents.
- Despite revenue growth, the company reported a net loss of $51.9 million for the quarter, reflecting ongoing investment in growth and operations.
- Operating expenses, particularly Sales & Marketing and General & Administrative, increased significantly as a percentage of revenue, driven by growth initiatives and IPO-related costs.
03—One dollar
Follow one dollar
For each $1.00 of revenue in Q2 FY2020, CrowdStrike Holdings, Inc. lost $0.48.
- Revenue$108.1M100.0%
- Cost of revenue−$31.6M29.2%
- Gross profit$76.5M70.8%
- Operating costs−$127.2M117.6%
- Operating income−$50.6M46.8%
- Interest, other & tax−$1.3M1.2%
- Net income−$51.9M48.0%
04—Financials
Financial Highlights
Figures from 10-QQ2 FY2020filed September 6, 2019Financial Statements
Q2 FY2020 against Q2 FY2019
| Line item | Q2 FY2020Q2 FY2019 | Change |
|---|---|---|
| Revenue | $108.11M$55.70M | +94.1% |
| Cost of Revenue | $31.58M$18.57M | +70.0% |
| Gross Profit | $76.53M$37.13M | +106.1% |
| R&D Expenses | $31.63M$18.96M | +66.8% |
| Operating Expenses | $127.17M$67.55M | +88.2% |
| Operating Income | -$50.64M-$30.43M | −66.4% |
| Interest Expense | $164K$236K | −30.5% |
| Net Income | -$51.89M-$32.88M | −57.8% |
| EPS (Basic) | $-0.10$-0.19 | +46.7% |
| Shares Outstanding (Basic) | 520.36M176.42M | +195.0% |
05—Questions
Frequently Asked Questions
What was CrowdStrike's revenue performance in this quarter?
CrowdStrike reported a significant increase in total revenue, growing 94% year-over-year to $108.1 million for the three months ended July 31, 2019. Subscription revenue, the primary driver of this growth, increased by 98% to $97.6 million.
How did the company's customer base change?
The company experienced substantial customer acquisition, with the number of subscription customers growing by 111% from 1,800 in the prior year period to 3,789 as of July 31, 2019.
What is the company's profitability situation?
While CrowdStrike demonstrated strong top-line growth and improved gross margins (71% overall), it reported a net loss of $51.9 million for the quarter. This loss is attributable to continued significant investments in sales and marketing, research and development, and general and administrative expenses, which increased substantially, partly due to expenses associated with the recent IPO.
What is the company's cash position after the IPO?
Following its Initial Public Offering (IPO) in June 2019, CrowdStrike significantly strengthened its financial position, ending the quarter with $732.8 million in cash and cash equivalents. This provides ample liquidity for ongoing operations and strategic investments.
06—Continue